To nurture the Green Revolution, the Government of India introduced the scheme of minimum assured price of foodgrains which are announced well before the commencement of the crop seasons, after taking into account the cost of production \ inter-crop price parity, market prices and other relevant factors.

The Food Corporation of India along with other Government agencies provide effective price assurance for wheat, paddy and coarsegrains.

FCI and the State Govt. agencies in consultation with the concerned State Govts. establish large number of purchase centres throughout the state to facilitate purchase of foodgrains

Centres are selected in such a manner that the farmers are not required to cover more than 10 kms.to bring their produce to the nearest purchase centres of major procuring states.

Price support purchases are organized in more than 12,000 centers for wheat and also more than  12,000 centers for paddy every year in the immediate post-harvest season.

Such extensive and effective price support operations have resulted in sustaining the income of farmers over a period and in providing the required impetus for higher investment in agriculture for improved productivity.

To name a few states about Rs.41,000 millions for paddy and 43,000 millions for wheat in Punjab and Rs. 45,000 millions for levy rice in Andhra Pradesh is paid to the farmers/ millers during wheat / rice procurement season.

India today produces over 200 million tonnes of foodgrains as against a mere 50 million tonnes in 1950.

In the last two decades, foodgrain procurement by Government agencies have witnessed a quantum jump from 4 million tonnes to over 25 million tonnes per annum.

Foodgrains are procured according to the Government - prescribed quality standards.

Each year, the Food Corporation purchases roughly 15-20% of India's wheat production and 12-15% of its rice production.

This helps to meet the commitments of the Public Distribution System and for building pipeline and buffer stock.

The Deppt. of Food, GOI has recently formulated aforesaid policy for involving Central Govt. Undertaking /State Govt. undertakings/for the Central Pool and expanding the scope of MSP operations in the areas where FCI/State agencies infrastructure for potential of procurement is weak and existing Govt. Agencies (FCI and State Agencies) are not able to carry out MSP operations in such areas where procurement exists to ensure that farmers are not denied the benefit of MSP. 

The eligibility Criteria and priority for engaging such Agencies/Private companies is mentioned n clause 2 to 2.3 of the policy guidelines. The private companies can only be engaged as last option as per the policy guideline. The engagement of agencies falling under clause2.2 and 2.3 must result in a cost saving of at least 10% of the incidentals (other than taxes, statutory charges etc.) of FCI as provided at point 3.3 of policy of guidelines of Ministry of Food. The other details are mentioned in the Policy Guidelines. The Central Govt. Undertaking/State Govt./Undertaking/Co-operatives/Private Companies fulfilling the eligibility criteria and desirous to undertake paddy procurement operations on behalf of FCI may contact concerned GMs(Region),/EDs(Zone) or Procurement Division, FCI Headquarters.